Quoddy Bay LNG suspends payments to tribe

Posted July 28, 2008, at 12 a.m.
Last modified Jan. 28, 2011, at 12:12 a.m.

PLEASANT POINT, Maine&nbsp- Quoddy Bay LNG, the company that hopes to build a liquefied natural gas terminal on Passamaquoddy tribal land off Route 190, has announced it will suspend temporarily the quarterly payments it has been making to the tribe.

In a press release issued Friday, Quoddy Bay indicated it so far has paid the tribe nearly $800,000, which has been split between the two tribal governments at Pleasant Point and Indian Township. The company said that it will suspend its quarterly payments of $46,875 while the federal and state permit reviews of its development application are on hold.

“Our position on payments to the reservation simply reflects the ebb and flow of the pace of development of a large facility such as this,” Donald Smith, president of Quoddy Bay LNG, said in a prepared statement.

Smith said in a separate interview Friday that the payments the company has made to the tribe have been voluntary because, according to the company’ s lease contract with the tribe, Quoddy Bay is not obliged to make payments to the tribe until the federal Bureau of Indian Affairs has given its final approval to the project. So far, the bureau has indicated only that the tribe can allow Quoddy Bay to seek federal and state permits to build a terminal on tribal land, he said.

Attempts last week and over the weekend to contact Passamaquoddy tribal governors, Rick Doyle at Pleasant Point and William Nichols at Indian Township, were unsuccessful. Hilda Lewis, a tribal councilor at Pleasant Point, directed inquiries last week to Doyle while Fred Moore, a Passamaquoddy tribal member and tribal liaison for Quoddy Bay, directed questions to Smith.

The issue of BIA approval has landed the parties in federal court. Nulankeyutmonen Nkihtahkomikumon, a Passamaquoddy group opposed to development of LNG terminals on Passamaquoddy Bay, filed suit against the bureau in November 2005, accusing the agency of not following federal rules when it gave its initial approval to the proposal.

Attorneys on each side of the lawsuit, which is still pending, have indicated in court documents that they are willing to negotiate for a possible settlement in the case, which could lead to the bureau revisiting the lease agreement between Quoddy Bay and the tribe.

Smith said Friday he had thought the initial green light from the bureau to pursue the project was more substantial than it has turned out to be. But he said he knew that at some point the bureau would have to revisit the project.

“We originally thought BIA made a decision that was automatic [pending approval by the Federal Energy Regulatory Commission],” Smith said. “I still knew it wasn’ t final.”

Earlier this month, Quoddy Bay announced it was delaying its state permitting review process while it works out further details of the proposed terminal and of the route its send-out pipeline will take in connecting with the Maritimes &amp Northeast Pipeline in interior Washington County. This spring, FERC cited insufficient information from the company when it suspended its federal review of Quoddy Bay’ s proposal.

According to Quoddy Bay’ s press release, the company hopes to resume the federal and state permitting review processes “in a few months.”

Smith said Friday that the suspension of payments to the tribe is not a sign that Quoddy Bay is having trouble financially. The company would like to find a major financial backer to help build the terminal once it is fully permitted, he said, but it has the operating funds necessary to get through the permitting process.

Smith also denied claims by LNG terminal opponents that Quoddy Bay has closed its office on Route 190. He said he laid off a local employee, whom he had hired while the firm was involved in community meetings and outreach, because the company is in a different phase of the developing the project now and doesn’ t have enough business in the community to warrant keeping the position.

“We haven’ t closed the office,” he said. “Our company is going forward and spending money on the project every day.”

Vera Francis, a Passamaquoddy tribal member and organizer for Nulankeyutmonen Nkihtahkomikumon, which translates into English as “we take care of our land,” wrote in an e-mail last week that that Quoddy Bay’ s perspective of the project does not reflect the reality of the situation, which she summarized as “no gas, no money, no ground lease, no terminal.”

Francis indicated that Quoddy Bay’ s misunderstanding of the issue of the bureau’ s approval shows that the company is not up to the task of developing the terminal, which could cost about $500 million to build.

“They clearly didn’ t do their homework, and they clearly underestimated the vision of those who stand by their cultural responsibility to protect and preserve Passamaquoddy Bay,” Francis wrote in the e-mail.

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